| 1. | What is an equipment lease? A lease is an agreement by you (the lessee) to pay a monthly payment for an agreed-upon length of time to the leasing company (the lessor) for equipment you have chosen from an equipment vendor of your choice. Depending on your goals, ownership may pass at the end of the lease (a capital lease) or might be available as an option at market value (an operating lease). |
| 2. | What type of equipment does Carlton Financial lease? Carlton leases virtually all kinds of "business-essential" equipment, for example: office workstations and furniture, computers, telecommunications equipment, medical and healthcare equipment, point-of-sale register systems, manufacturing and construction equipment, and much, much more. |
| 3. | How can my business benefit from leasing? Leasing provides you with the necessary equipment when you need it without the large down payments generally required by banks, and oftentimes with more lenient credit requirements. This is true whether your business is new or established; financially strong or challenged. Leasing also allows you to preserve capital. You can invest in more profitable areas, to maximize return-on-investment and return-on-equity. Your working capital can be invested in personnel, marketing, expansion, inventory, or future business acquisition. Alternatively, you can preserve your cash for unknown emergencies. |
| 4. | Why is leasing so popular in today’s marketplace? Financing and leasing allow your money to work harder because they assist in managing change and cash flow. You pay for your equipment as it performs its job. Your payments balance your revenues to your expenses. |
| 5. | Can I select my own equipment and vendor? Yes, you select the equipment and vendor, ensuring your specific needs are met and the best price secured. Let us know if we can help – we can recommend equipment manufacturers and distributors in many areas of capital equipment you acquire for your business. |
| 6. | How can I be sure that I’m getting the best price on the equipment I’ve chosen? You do all the negotiating; thus, you have complete control over the pricing you receive. Then, on your company’s behalf, Carlton Financial purchases the equipment that you’ve selected at the agreed-upon price. |
| 7. | So Carlton Financial owns the leased equipment? Yes, as the leasing company, Carlton owns the leased equipment during the life of the lease. |
| 8. | What if I need equipment from multiple suppliers on my lease? This occurs quite often and presents no problem. You can have multiple suppliers on one lease. |
| 9. | What kind of investment is required to obtain an equipment lease? Like most lessors, we generally require first and last payment. If there are credit concerns we may also require a personal or corporate guaranty, security deposit or some form of collateral. |
| 10. | How will I be billed? Depending on your needs, Carlton will generate an invoice monthly, quarterly, semi-annually or annually. Today, many corporations prefer to have the payment set up to automatically debit their bank. |
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| 11. | Are my monthly rental payments tax deductible? Properly structured leases (FASB qualified) are 100% tax deductible. Moreover, deductions are taken from pre-tax earnings, not after-tax profits. In all instances, we recommend that you consult with your accountant or tax advisor for advice on how to expense your lease. |
| 12. | Who pays sales and use taxes? Your company is responsible for any and all sales and use taxes. Carlton will collect and remit these to the appropriate taxing authority. |
| 13. | What effect will leasing have on my bank line of credit? Your bank line of credit is unaffected, because financing or leasing with Carlton Financial compliments your bank operating line as an additional source of funds. |
| 14. | Who is responsible for insuring leased equipment? This is the lessee’s responsibility. You will be asked by Carlton to provide proof of insurance coverage. Generally this is accomplished simply by asking your insurance provider to list Carlton as additional insured and loss payee. |
| 15. | How long does a lease last? Typical lease terms are 24, 36, 48, 60 and 84 months (although the 84-month term is used for large ticket items only and is provided on a case-by-case basis). Custom lease terms are available to coincide with special project terms. |
| 16. | What are my options when my lease is up? When your lease is up, you can purchase the equipment, continue leasing or return equipment to the lessor. If you decide to purchase, options may include Fair Market Value, Dollar Buyout and Purchase Upon Termination (PUT). |
| 17. | What is a "Fair Market Value" purchase option? If your lease contains a “Fair Market Value” purchase option, you may purchase the equipment at the end of the lease for its then fair market value. |
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| 18. | What is a "Dollar Buyout" purchase option? The lease structured with a "Dollar Buyout" purchase option is a capital lease, or ownership lease. At the end of the stated lease term you will own the equipment for $1.00. |
| 19. | What is "Purchase Upon Termination" or "PUT"? "Purchase Upon Termination" is a different kind of capital lease in which you purchase the equipment at the end of the lease for a percentage of the original purchase cost. The percentage is determined at the inception of the lease. |
| 20. | Can I pay off the lease early? Yes, a payoff can be calculated at any time during the term of the lease. |
| 21. | Can I cancel my lease before the term is up? No, all leases are non-cancelable contracts. |
| 22. | What if I want to upgrade or add on equipment before the end of the lease? Yes, this can be done. Your representative can assist you in reviewing options related to a new lease schedule. |
| 23. | Are "soft" costs, like training, installation, etc., included in a lease agreement? Yes, we can provide 100% financing, including many of the "soft costs" associated with your equipment "systems." This is a very important service that Carlton Financial provides. |
| 24. | Who do I turn to for warranty service and ongoing maintenance? The vendor (or original supplier of the equipment) will provide all warranty service. The warranty is handled exactly as it would be if you paid the vendor directly for the equipment. Once the warranty has expired, you can hire whomever you want for ongoing maintenance and repairs. |
| 25. | If my company is new, can I still lease? Yes, pending a credit approval. A personal/corporate guaranty or additional credit enhancements may also be required. |
| 26. | Does the equipment have to be new? No, Carlton provides lease financing for both used and new equipment. |
| 27. | Can I lease equipment I already own? Yes, we will buy equipment that you recently purchased using a Bill of Sale and lease it back to you. Many of our clients like this because it frees up cash. |
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ARIZONA SALES OFFICE 3029 Dollar Mark Way, Suite C Prescott, AZ 86305 (928) 777-7003 * Fax (928) 777-9083 |
CORPORATE OFFICE 1907 E. Wayzata Blvd., Suite 180 Wayzata, MN 55391 (952) 831-4490 * Fax (952) 831-4201 |
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